LIFE CYCLE COSTING · Life Cycle Costing Colorado Department of Transportation 2 2. Background The job of expanding and maintaining 9,200 miles of state highways, 1,950 bridges and

Report No. CDOT-DTD-R-2006-3 Final Report LIFE CYCLE COSTING Phil Anderson, URS Corporation

February 2006 COLORADO DEPARTMENT OF TRANSPORTATION RESEARCH BRANCH

The contents of this report reflect the views of the

author, who is responsible for the facts and accuracy

of the data presented herein. The contents do not

necessarily reflect the official views of the Colorado

Department of Transportation or the Federal

Highway Administration. This report does not

constitute a standard, specification, or regulation.

Technical Report Documentation Page 1. Report No. CDOT-DTD-R-2006-3

2. Government Accession No.

3. Recipient's Catalog No.

5. Report Date February 2006

4. Title and Subtitle LIFE CYCLE COSTING

6. Performing Organization Code

7. Author(s) Phillip Anderson

8. Performing Organization Report No. CDOT-DTD-R-2006-3

10. Work Unit No. (TRAIS)

9. Performing Organization Name and Address URS Corporation 1225 17th Street Suite 200 Denver, CO 80202

11. Contract or Grant No. PG HAA 05HQ221

13. Type of Report and Period Covered Final

12. Sponsoring Agency Name and Address Colorado Department of Transportation Division of Transportation Development 4201 E. Arkansas Ave. Denver, CO 80222

14. Sponsoring Agency Code 62.50

15. Supplementary Notes Prepared in cooperation with the US Department of Transportation, Federal Highway Administration

16. Abstract The research project was initiated by the Colorado Department of Transportation (CDOT) to develop guidelines for determining the long-term costs of adding additional capacity and other related transportation improvements to the state highway and bridge system. Future costs, including ongoing maintenance, rehabilitation, and replacement costs have not been traditionally considered when a project is advanced. At the planning level this project allows for CDOT to estimate the future cost of adding capacity to the transportation system and to assess the impacts that transportation related projects will have on future year budgets In completing the project a methodology was proposed that would capture the incremental increase in long-term project costs associated with adding additional capacity to the system. Incremental costs were defined as not only geometric increases, but also include such things as roadway and bridge maintenance, ITS deployment and maintenance, and roadway and bridge rehabilitation. Incremental costs were identified as long-term projects costs that CDOT would have to account for in future budgets. As anticipated, research results reflect that long-term project costs associated with capacity improvements to the state transportation system will require additional financial resources in future years. Implementation: The proposed guidelines for performing life cycle costing for CDOT will allow for the development of estimates of future expected revenues necessary to maintain and rehabilitate the state’s transportation system on a project basis.

17. Keywords transportation investments

18. Distribution Statement No restrictions. This document is available to the public through the National Technical Information Service Springfield, VA 22161

19. Security Classif. (of this report) Unclassified

20. Security Classif. (of this page) Unclassified

21. No. of Pages 29

22. Price

Form DOT F 1700.7 (8-72) Reproduction of completed page authorized

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TABLE OF CONTENTS

1. EXECUTIVE SUMMARY......................................................................................................... 1 2. BACKGROUND...................................................................................................................... 2 3. PURPOSE .............................................................................................................................. 4 4. METHODOLOGY ................................................................................................................... 5

Roadway ............................................................................................................................. 8 Bridge.................................................................................................................................. 8 ITS....................................................................................................................................... 9

5. GUIDELINES FOR DETERMINING RECURRING COSTS.......................................................... 11 Initial Construction ........................................................................................................... 11 Maintenance...................................................................................................................... 12 Rehabilitation.................................................................................................................... 14 Reconstruction/Replacement ............................................................................................ 15

6. FUTURE PROJECT COST ESTIMATION ................................................................................. 16 7. REPRESENTING LONG-TERM PROJECT COSTS .................................................................... 18 8. CONCLUSIONS AND RECOMMENDATIONS........................................................................... 24

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TABLES

TABLE 1. CONSTANT 2005 DOLLARS ............................................................................................. 22 TABLE 2. YEAR OF EXPENDITURE DOLLARS .................................................................................. 23

Life Cycle Costing Colorado Department of Transportation

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1. Executive Summary

The research project was initiated by the Colorado Department of Transportation (CDOT) to

develop guidelines for determining the long-term costs of adding additional capacity and other

related transportation improvements to the state highway and bridge system. Future costs,

including on-going maintenance, rehabilitation and replacement costs have not been traditionally

considered when a project is advanced. At the planning level this project allows for CDOT to

estimate the future cost of adding capacity to the transportation system and to assess the impacts

that transportation related projects will have on future year budgets

In completing the project a methodology was proposed that would capture the incremental

increase in long-term project costs associated with adding additional capacity to the system.

Incremental costs were defined as not only geometric increases, but also include such things as

roadway and bridge maintenance, ITS deployment and maintenance, and roadway and bridge

rehabilitation. Incremental costs were identified as long-term projects costs that CDOT would

have to account for in future budgets.

As anticipated, research results reflect that long-term project costs associated with capacity

improvements to the state transportation system will require additional financial resources in

future years.

The proposed guidelines for performing life cycle costing for CDOT will allow for the

development of estimates of future expected revenues necessary to maintain and rehabilitate the

state’s transportation system on a project basis.


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2. Background

The job of expanding and maintaining 9,200 miles of state highways, 1,950 bridges and an

expanding ITS system has become increasingly more difficult for CDOT. The state’s rapidly

growing population and even faster growing Vehicle Miles of Traveled coupled with recent

reduced budgets has made it difficult for CDOT to carry out its mandated activities today and in

future years. The 2030 State Transportation Plan suggests that travel is expected to grow

significantly over the next 26 years and that currently projected revenues will fall dramatically

short of what it would take to build and maintain the transportation system to desired levels.

Specifically, issues relating to Senate Bill 1, the Taxpayers Bill of Rights, Amendment 23 and

the economic downturn after 9/11 have directly and indirectly negatively affected CDOT’s

revenue stream.

At the federal level, the long delay in passing a transportation reauthorization bill provided

further fiscal uncertainty. The net effect of financial issues at the state and federal level has

resulted in a significant drop in revenue for highway related activities. In 2001, revenues from all

sources for CDOT related activities were approximately $1.4 billion. In contrast, the most recent

budget (2006) provides only $817 million despite the fact that demand and expectations from

users of the system has and will continue to grow. It has become clear that existing allocation

processes are not adequate in this era of diminishing resources and ever increasing demand.

To address financial related issues, CDOT developed a Resource Allocation process by which

revenues estimates are allocated to five CDOT Investment Categories. The Performance

Measures Program enables CDOT to track system performance. The five Investment Categories

are:

1. Safety-Programs - Services and projects that reduce fatalities, injuries, and property

damage for all users of the system.

2. Systems Quality - Activities, programs and projects that maintain the function and

aesthetics of the existing transportation system.


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3. Mobility-Programs - Services and projects that provide for the movement of people,

goods and information.

4. Program Delivery - Support functions that enable the delivery of CDOT’s programs and services.

5. Strategic Projects-The 28 high priority projects that have been committed for

accelerated funding.

Within these five Investment Categories, each of CDOT’s program areas reside. For example,

the Maintenance program is distributed among the Safety, Systems Quality, Mobility and

Program Delivery Investment Categories, whereas the ITS program areas reside within the

System Quality and Mobility Investment Categories.


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3. Purpose

The purpose of this research project is to develop guidelines that allow CDOT to capture the

long-term costs of adding additional capacity and other transportation related improvements to

the state highway and bridge system. Historically, only the initial cost of a project has been

analyzed to determine whether a project would be implemented. Future costs including

maintenance, rehabilitation and reconstruction/replacement costs have not been traditionally

considered in the decision making process to determine if a project moves forward. However,

these costs are significant and have an impact on future budgets.

Once these additional recurring costs have been identified, they can be allocated to the

appropriate CDOT investment categories (Mobility, System Quality, Program Delivery and

Safety), for Transportation Commission consideration in the decision making process. It is

anticipated that the results of this study will provide information that will be useful in developing

future state transportation plans, the annual budget and the State Transportation Improvement

Program (STIP) by alerting policy makers to the long-term impacts of current decisions.


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4. Methodology

In developing long-term costs associated with increasing the assets of the state transportation

system, recurring costs for maintenance, rehabilitation and reconstruction/replacement will be

developed for each proposed asset. The process will also account for any incremental increases

to the system and the associated recurring costs. For purposes of this project, incremental

increases to the transportation infrastructure are not only geometric increases (i.e. capacity), they

also include activities such as ITS deployment, Noise Walls, and Guardrail, etc. The proposed

analysis period will be 40 years based on pavement life, but various “snapshots” reflecting the 6-

year STIP and 2030 Statewide Transportation Plan can also be accommodated. Output will be

reflected in a template that will provide Year of Expenditure Dollars and Constant 2005 Dollars.

Steps involved in developing the incremental costs are as follows:

1. Develop a typical section for the existing facility - This should include components

such as pavement width including travel lanes, passing lanes, shoulder width as well as

right-of way for both highway and bridge facilities. Existing components such as

lighting, guardrails, noise walls, barriers and ITS should also be noted.

2. Develop a typical section that includes the proposed improvement(s) - This should

include pavement width with additional travel lanes, passing lanes and shoulder-related

improvements as well as additional right-of-way for both highway and bridge facilities

necessary to implement the proposed facility. In addition, components such as the

addition of lighting, guardrail, noise walls, barriers, ITS improvements or other

transportation related improvements having recurring maintenance, rehabilitation and

reconstruction/replacement costs should be identified.

3. Determine the incremental increase over the existing facility - This analysis should

define and include all incremental improvements to the existing highway or bridge

structure that should be tracked over the life of the project. Incremental costs are

improvements above and beyond those on the existing facility. Specifically, the analysis


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should identify the additional pavement width, additional travel lanes, passing lanes, and

shoulder width expansions and other components such as lighting, guardrail, noise walls,

barriers, ITS improvements or other transportation related improvements having

recurring maintenance, rehabilitation and reconstruction/replacement costs.

The following four categories and the activities associated with them will provide the basis for

developing initial and recurring project costs for highway and bridge projects.

Initial Construction

Construction

Preliminary Engineering

Construction Engineering

Traffic Control

Right-of Way

ITS

Guard Rails

Barriers

Lighting

Noise Walls

Maintenance

Planning and Training

Road Surface

Roadside Facilities

Roadside Appearance


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Traffic

Structures

Snow and Ice Control

Equipment/Buildings/Grounds

Tunnels

Rehabilitation

Rehabilitate



Traffic Control

Replace/Update ITS

Guard Rails

Barriers

Lighting

Noise Walls

Reconstruction/Replacement

Reconstruct



Traffic Control

ITS

Guard Rails


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Barriers

Lighting

Noise Walls

Roadway

There is a significant data set relating to roadway construction and preservation activities. Some

general assumptions developed by CDOT and incorporated into the 2005 Pavement Design

Manual should be used to guide and frame the project cost analysis.

The analysis period for asphalt pavements is 40 years. The initial design period is 20

years and the rehabilitation schedule suggests a 2” Hot Mix Asphalt (HMA) overlay at

10, 20, and 30 years.

The analysis period for Portland Cement Concrete Pavements (PCCP) is 40 years. The

initial design period is 30 years and the rehabilitation for PCCP is either:

1. PCCP with dowel and tie bars will require 50% full width diamond grinding

of ¼” to restore reliability at 22 years with joint resealing and ½% slab

replacement in the travel lanes.

2. PCCP without dowels or tie bars will still require full width diamond grinding

of ¼” with joint resealing and 1% slab replacement in travel lanes.

Or

Another rehabilitation strategy for PCCP is to provide a 2” HMA overlay at 20 and 30

years or a 3” HMA overlay at 20 and 30 years in a high volume urban area.

Bridge

CDOT does not currently perform life cycle cost analysis on proposed bridge improvements or

replacements. However it does have data on what it currently costs to perform bridge

rehabilitation related activities. It is anticipated that over the next 2 years that CDOT will


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employ the preservation module of PONTIS, the CDOT bridge management system, to

determine a life cycle cost analysis.

Output from the PONTIS preservation module will recommend specific work types and

frequency of application as well as the cost to maintain a bridge structure at a certain “Health

Index” for each work type. Specific activities should include maintenance and bridge deck

replacement. Until the PONTIS preservation module is fully operational, it is suggested that for

each bridge capacity improvement project that staff confer with staff from the Bridge Section to

establish an estimate of cost and frequency for rehabilitation and replacement activities.

However, it is important to note that much of the ongoing bridge maintenance is captured in the

structures Maintenance Program Area component of the CDOT Maintenance budget and that this

information is bridge specific.

ITS

The ITS program and its application is anticipated to grow and become a more significant

component of projects that add capacity to the state highway system. Several recent studies

performed by CDOT including the ITS Management System Framework, the ITS Management

System Requirement Report and the ITS Maintenance Management Framework attest to the

growing importance of ITS within CDOT, the latter of which addresses life cycle costs.

While certain data on ITS applications is available, it has not been consistently collected for all

applications. The ITS Branch is currently developing a reporting system that will allow for

CDOT to perform life cycle cost analysis based on actual maintenance and replacement costs.

CDOT has identified over 30 ITS applications ranging from Automatic Traffic Recorders to

various levels of Variable Message Systems (VMS). Over 100 specific activities relating to

maintaining and replacing these applications have been identified. To simplify the process, the

100 plus activities have been subsumed under four major categories for each ITS application in

an attempt to develop a life cycle cost for each ITS application. The categories are preventative,

routine, corrective and replacement. Preventative activities are scheduled maintenance activities.


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Routine activities are non-scheduled maintenance activities. Corrective activities are those

involving fixing a problem with a device or component. Replacement activities are those

involving replacement of a device or component. Until the database is sufficiently populated, it

is suggested that staff confer with CDOT ITS staff to establish an estimate of cost and frequency

for maintenance, rehabilitation and replacement activities.

Variable costs and how future year expenditures are expressed are key concerns in refining

project costs and allocating them back to the current and future year STIPs and state

transportation plans. Following is some brief guidance relating to each.

Variable Cost - Since construction, maintenance, rehabilitation and reconstruction/replacement

costs vary throughout the state based on topography, climatic and other conditions, it is proposed

that where available the data used to develop the initial and recurring project costs for all

transportation improvements should be retrievable at the CDOT region, county or route and

reference point specific location.

Future Year and Constant Dollar Costs -Future costs or Year of Expenditure Dollars should

be developed by multiplying the average annual increase for that activity against the most recent

expenditure for that activity, taking into consideration what year that activity would occur. For

example, if a major rehabilitation project were estimated to cost $2,500,000 in 2005 the cost to

perform that activity in 2015 based on the Pavement Management Guidelines would be

$3,500,000 based on a 5% average annual increase for that activity. To be compatible with costs

developed for the 2030 Statewide Transportation Plan, project related costs should be expressed

as 2005 Constant Dollars. For instance, if a resurfacing project (rehabilitation) were said to cost

$3,500,000 in Year of Expenditure Dollars in 2015, it would be discounted back to 2005

Constant Dollars by discounting the 2015 project cost by 5% per year.


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5. Guidelines for Determining Recurring Costs

It is suggested that, in addition to developing project cost for the four major activities, (Initial

Construction, Maintenance, Rehabilitation and Reconstruction/Replacement) that a diagram be

developed that graphically shows the recurring activities associated with a project’s life. The

following diagram reflects the significant activities of a major capital project over a 40-year

period. Ideally, this figure can be developed for highway, bridges and for ITS applications.


Although the bulk of a project’s cost are directly associated with pavement and related sub-grade

activities, other activities are not always fully accounted for in project development. While the

majority of initial construction activities (i.e., construction, preliminary engineering, construction

engineering and traffic control) are developed by the project engineer for highway and bridge

projects, other potential items including ITS, guardrails, noise barriers, barriers and lighting,

signalization and their associated costs, are often not accounted for in project development.

Expenditure data for each category can be disaggregated to the CDOT region level, county or by

route and reference point. These are important financial considerations because, at some time in

2004 Year 2014 2024 2034 2044Reconstruction


Rehabilitation # 1 Rehabilitation # 2 Rehabilitation # 3

Maintenance Maintenance Maintenance Maintenance


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a project’s life, some, if not all, of these must be maintained, rehabilitated or

reconstructed/replaced. The cost to maintain, rehabilitate, and reconstruct/replace these

additional items will be accounted for under the maintenance, rehabilitation and

reconstruction/replacement categories listed below. Activities under Initial Construction are

associated with all Investment Categories.

Maintenance

CDOT is expected to spend approximately $210.0 million on maintenance activities in 2006.

Unlike construction and rehabilitation costs, which occur only periodically, maintenance costs

recur annually. In an effort to track maintenance related expenditures and performance, CDOT

developed its Performance Budgeting System for Maintenance. This system annually measures

the conditions of over fifty activities or system items on the state’s highway and bridge network.

Examples of these specific activities include patching by hand or machine, sealing of pavement

cracks and joints, seal coating, balding unpaved surfaces and shoulders, cleaning drainage

structures, cleaning and shaping ditches, repairing slopes, maintaining stream beds, sweeping the

road surface, picking up litter and trash, controlling vegetation, maintaining roadway signs and

lighting, painting bridges, snow plowing and ice control, removing snow and sand. These

activities or system items are reflected in the nine Maintenance Program Areas (MPAs) below.

They are:

Planning and Training

Road Surface

Roadside Facilities

Roadside Appearance

Traffic

Structures

Snow and Ice Control

Equipment/Buildings/Grounds


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Tunnels

Expenditure data for each MPA is available from 1999 to the present. Expenditure data for each

category can be disaggregated to the CDOT region level, county or by route and reference point.

To gain a better understanding of the annual maintenance expenditure stream it is recommended

that information be collected for each of the nine MPAs.

In calculating the future maintenance expenditures it is suggested that the average annual

percentage increase for each category in the 1999-2004 expenditure data be applied to reflect

year of expenditure dollars. For example, if it were determined that the snow and ice control

MPA grew at an annual rate of 3.0% for the six year period 1999-2005 that percentage would be

used to develop future year expenditures. If the base year of the project is 2006 and the 2005

expenditure was $1,500 per lane mile, the 2006 snow and ice control expenditure would be

$1,545 per lane mile in year of expenditure dollars or $1,500 in 2005 dollars. A similar level of

analysis should be performed for the remaining eight MPAs. The bulk of roadway maintenance

related activities are associated with the Safety, System Quality, Mobility and Program Delivery

Investment Categories.

Bridge maintenance is reported in the Structures MPA in the maintenance budget and is

associated with the System Quality Investment Category. Information for each bridge is reported

by structure number and by specific geographic location.

ITS maintenance is not currently accounted for in any of the nine MPAs of the CDOT

maintenance budget, but rather is a program area under the System Quality Investment Category.

As mentioned on page 7, the ITS maintenance reporting system is currently being developed. It

will collect information for each ITS project application based on four types of maintenance

categories (Routine, Preventative, Corrective and Replacement) and 100 plus specific activities

subsumed under the four categories for each ITS application. Once initiated and when sufficient

information is collected, the reporting system will provide cost and frequency of application


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information for each of the 30 or more applications. It is suggested that the expenditure data be

expressed by CDOT region, county, or by route and reference point for each ITS application.

Rehabilitation

Specific rehabilitation activities, associated costs and their timing relative to roadway pavement

improvements and bridge deck replacements include Preliminary Engineering, Construction

Engineering and traffic control, are developed based on the 2005 Pavement Design Manual.

These costs are presented in Year of Construction Dollars or what it would cost today to

rehabilitate a roadway 10, 20, and 30 years from now, not what it would cost in those future

years if construction inflation were taken into consideration.

In developing rehabilitation costs, current CDOT practice suggests that the Cost Data Manual be

used unless up-to-date bid prices are available for similar work in the generalized area. CDOT

has developed a normalized unit cost at the state and CDOT region level for HMA and PCCP

based on projects constructed from 2000 through 2003.

In calculating the future rehabilitation expenditures, it is initially suggested that the average

annual percentage increase from 2000 through 2003 expenditure data be applied to reflect Year

of Expenditure Dollars for future rehabilitation projects. For example, if it were determined that

a rehabilitation project (Pavement, PE, CE TC) would require $2.5 million in 2004 and the

average annual rate of increase in HMA or PCCP projects was 5.0%, the Year of Expenditure

Dollars necessary to complete the project in 2014 would be approxiametly $3.75 million. These

rehabilitation activities are associated with the System Quality Investment Category.


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Reconstruction/Replacement

This component of the project cost analysis takes into consideration the reconstruction of the

entire pavement including the types of activities listed above under initial construction including

the reconstruction or replacement of a bridge. While the majority of initial construction

activities (i.e. construction/reconstruction, preliminary engineering, construction engineering and

traffic control) are developed by the project engineer, a host of other potential items including

ITS, guardrails, noise walls, barriers, lighting and signalization have to be accounted for as future

year project expenditures. For roadway surfaces this may occur in 40 years, for bridges as far

out as 75-100 years. However, many of the other activities related to full long-term project

costing have relatively short life cycles and must be replaced relatively often over a project’s life.

For example, an overhead variable message sign may only have a life cycle between 10 and 20

years, requiring its replacement at least once, if not twice over the life of the roadway. It is

important that these additional costs are fully reflected as expenditures in future years.

Typically, Reconstruction/Replacement cost are associated with the System Quality Investment

Category.


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6. Future Project Cost Estimation

Estimates for future costs can be made using Constant or Year of Expenditure Dollars. Constant

Dollars reflect dollars with the same or constant purchasing power over time. The cost of

performing an activity would not change as a function of the future year in which it would be

accomplished. For example, if Hot Mix Asphalt (HMA) cost $20 per ton today, then $20 per ton

should be used for future year HMA cost estimates. Alternatively, Year of Expenditure Dollars

represents dollars that fluctuate in purchasing power as a function of time. They are normally

used to reflect future price increases due to anticipated inflation. Year of Expenditure Dollars

reflect the future year in which the activity is performed. For example, if HMA costs $20 per ton

today and the cost of doing business is expected to rise by 5% per year the price would rise to

$21 per ton one year from now.

The estimation of project costs will be performed in two ways. The first will be compatible with

the 2030 State Transportation Plan that is based on 2005 Constant Dollars. The second way of

expressing future year expenditures will be Year of Expenditure Dollars; which is more

compatible with budget and STIP related concerns.

For both Constant and Year of Expenditure Dollars, expenditures will be assigned to the

appropriate Program Areas for each Investment Category. For example, maintenance

expenditures will be reflected in the Safety, Systems Quality, Mobility and Program Delivery

Investment Categories and ITS investments or maintenance in Mobility and System Quality.

The future year project costs will reflect the anticipated project costs for the proposed facility

including the incremental project increase. For example, from a pavement or bridge perspective,

if the roadway surface goes from 28 feet (two 12-foot lanes and two 2-foot shoulders) to a 48-

foot roadway surface (two 12-foot lanes including One 12-foot passing lane and two 6-foot

shoulders) it is suggested that 58% of the maintenance, rehabilitation and reconstruction costs be


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allocated to the existing facility and the remaining 42% reflect costs associated with the

incremental increase of the project.


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7. Representing Long-Term Project Costs

The following two tables reflect long-term project costs in Constant 2005 dollars and Year of

Expenditure Dollars and will address the needs of meeting the requirements of the Statewide

Plan as well as immediate financially relevant issues relating to budget and STIP development.

They represent a hypothetical project and are used only to show how long-term project costs can

be expressed in an easy to understand format. Attachment A “CDOT Life Cycle Cost Analysis

Guidebook” is the Excel spreadsheet used to develop total and incremental project costs.

Each table represents an aggregation of estimated expenditures for each category, including

Initial Construction, Maintenance, Rehabilitation, and Reconstruction/Replacement as a simple

way of expressing long-term project costs. For example, construction expenditures should

reflect all related activities associated with the mobility enhancing project including not only the

cost to construct a bridge or roadway but other investments above and beyond that which were

already in place. This might include ITS improvements, Noise Walls, Guardrail, Barriers,

lighting and signalization, etc. Maintenance related costs should include not only pavement or

bridge related maintenance costs but also those maintenance costs associated with implementing

ITS and other types of maintenance activities. Rehabilitation cost should also include not only

pavement or bridge deck related activities but also ITS and other transportation related

rehabilitation activities. Reconstruction/Replacement activities need to reflect not only pavement

construction or bridge replacement but also the costs associated with replacing noise walls,

guardrails, ITS devices, and other items throughout the project’s life.

Specifically, the columns identify the major activities such as initial construction, reconstruction,

replacement, maintenance, and rehabilitation that reflect the total long-term project costs for each

activity over the forty-year project’s life. The rows represent the cumulative cost of all activities

including maintenance, rehabilitation and replacement for each year of the project’s 40-year life.

These costs represent the total project cost, as well as the incremental cost over and beyond that


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of the original project. The shaded columns indicate the total project cost for each relevant

activity. The un-shaded columns reflect the incremental cost over those of the original project.

Based on the suggested methodology, only those improvements in excess of those already

present should be accounted for. For example, if an existing roadway or bridge surface is

expanded from 28 feet to 48, feet then approxiametly 42% of the long-term projects cost for

maintenance, rehabilitation and reconstruction costs should be identified by year of occurrence

and accounted for as a long-term project cost. Similarly, if a Variable Message Sign (VMS)

Overhead is installed as part of a project, preventative maintenance, routine maintenance,

corrective maintenance, and replacement costs should be identified by year of occurrence and

accounted for as a long-term project cost. The sum of these incremental costs reflects a financial

obligation over and beyond that required of the existing facility.

Table 1-Constant 2005 Dollars and Table 2-Year of Expenditure Dollars represents a $10

million roadway or bridge project that rebuilds the existing roadway surface from 28 foot to 48

foot. It also includes the installation of a VMS Overhead sign. The roadway surface will be

totally reconstructed in 40 years and the VMS Overhead sign will be replaced every ten years at

a cost of approxiametly $100,000 or approxiametly four times over the project’s life.

Maintenance activities will include not only roadway surface or bridge maintenance but also the

preventative, routine, and corrective maintenance related to keeping the VMS Overhead sign

operational over the project’s life. Rehabilitation costs for this project in the form of major

resurfacing are scheduled at ten-year intervals at a cost of $4,300,000 in 2005 constant dollars.

From a reconstruction perspective, only incremental costs will be calculated. Based on the above

example, approxiametly 42% of the future year reconstruction cost of the facility would be

considered an incremental cost. However, since the ITS VMS Overhead sign was not originally

a component of the existing project, the full replacement costs for each sign would be included

as an incremental long-term project cost.


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Maintenance costs for roadway surface and bridge maintenance would be developed similar to

the proposed calculation method proposed for reconstruction with the incremental cost of

roadway or bridge maintenance being approxiametly 42%. For example, based on $9,500 per

lane mile for maintenance activities, a 48-foot roadway would require about $38,000 per year in

2005 constant dollars. However, the existing facility would absorb $22,167 of the $38,000

leaving an incremental maintenance cost of $15,833 attributable to adding capacity to the

original asset. ITS routine, preventative and corrective maintenance costs, however, would fully

be accounted for as incremental project costs because they were not features of the existing

project.

Rehabilitation costs associated with roadway surface or bridges should be calculated similar to

reconstruction and maintenance costs by applying the 42% factor that represents the incremental

increase over the existing facility.

Year of Expenditure Dollars would reflect the cost including inflation based on a trend analysis

of the dataset for each activity.

The following tables represent both the full project costs as well as the incremental costs

associated with the proposed project. They reflect a method and do not necessarily represent true

costs for construction, reconstruction, maintenance or rehabilitation activities. What the tables

do show is a way to gain a better grasp of long-term costs not normally reflected in project

development. From this hypothetical example, Table 1-Constant 2005 Dollars reflects a forty-

year total project cost, including annual roadway maintenance, ITS acquisition and maintenance,

and roadway rehabilitation of $19.1 million with $8.2 million attributable to incremental costs

associated with maintenance, ITS and rehabilitation activities. Similarly, Table 2-Year of

Expenditure Dollars reflects a forty-year total project cost, including annual roadway

maintenance, ITS acquisition and maintenance, and roadway rehabilitation of $72.4 million with


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$31.4 million attributable to incremental costs associated with maintenance, ITS and

rehabilitation activities


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Table 1. Constant 2005 Dollars

Year Initial Construction

ITS Acquisition and Maintenance

Roadway Maintenance

Incremental Maintenance Rehabilitation Incremental

Rehabilitation

Total Cost (Including

Incremental)

Incremental Cost Total

0 10,000,000 - - 1 500 38,000 15,833 38,500 16,333 2 500 38,000 15,833 38,500 16,333 3 500 38,000 15,833 38,500 16,333 4 500 38,000 15,833 38,500 16,333 5 500 38,000 15,833 38,500 16,333 6 500 38,000 15,833 38,500 16,333 7 500 38,000 15,833 38,500 16,333 8 500 38,000 15,833 38,500 16,333 9 500 38,000 15,833 38,500 16,333 10 100,500 38,000 15,833 4,300,000 1,791,667 4,438,500 1,908,000 11 500 38,000 15,833 38,500 16,333 12 500 38,000 15,833 38,500 116,333 13 500 38,000 15,833 38,500 16,333 14 500 38,000 15,833 38,500 16,333 15 500 38,000 15,833 38,500 16,333 16 500 38,000 15,833 38,500 16,333 17 500 38,000 15,833 38,500 16,333 18 500 38,000 15,833 38,500 16,333 19 500 38,000 15,833 38,500 16,333 20 100,500 38,000 15,833 4,300,000 1,791,667 4,438,500 1,908,000 21 500 38,000 15,833 38,500 16,333 22 500 38,000 15,833 38,500 116,333 23 500 38,000 15,833 38,500 16,333 24 500 38,000 15,833 38,500 16,333 25 500 38,000 15,833 38,500 16,333 26 500 38,000 15,833 38,500 16,333 27 500 38,000 15,833 38,500 16,333 28 500 38,000 15,833 38,500 16,333 29 500 38,000 15,833 38,500 16,333 30 100,500 38,000 15,833 4,300,000 1,791,667 4,438,500 1,908,000 31 500 38,000 15,833 38,500 16,333 32 500 38,000 15,833 38,500 16,333 33 500 38,000 15,833 38,500 16,333 34 500 38,000 15,833 38,500 16,333 35 500 38,000 15,833 38,500 16,333 36 500 38,000 15,833 38,500 16,333 37 500 38,000 15,833 38,500 16,333 38 500 38,000 15,833 38,500 16,333 39 500 38,000 15,833 38,500 16,333 40 100,500 38,000 15,833 4,300,000 1,791,667 4,438,500 1,908,000

Total 10,000,000 420,000 1,520,000 633,320 17,200,000 7,166,668 19,140,000 8,219,988

Assumptions:Initial construction costs are not included in the life cycle cost analysis.All costs in 2005 Dollars

Incremental Project costs equals 42% of total project costs.


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Table 2. Year of Expenditure Dollars

Year Initial Construction

ITS Acquisition and Maintenance

Roadway Maintenance

Incremental Maintenance Rehabilitation Incremental

Rehabilitation

Total Cost (Including

Incremental)

Incremental Cost Total

0 10,000,000 - 1 500 39,140 16,308 39,640 16,808 2 500 40,314 16,797 40,814 17,297 3 500 41,524 17,301 42,024 17,801 4 500 42,769 17,820 43,269 18,320 5 500 44,052 18,355 44,552 18,855 6 500 45,374 18,905 45,874 19,405 7 500 46,735 19,473 47,235 19,973 8 500 48,137 20,057 48,637 20,557 9 500 49,581 20,658 50,081 21,158

10 179,085 51,069 21,278 7,004,247 2,918,436 7,234,401 3,118,799 11 500 52,601 21,917 53,101 22,417 12 500 54,179 22,574 54,679 23,074 13 500 55,804 23,251 56,304 23,751 14 500 57,478 23,949 57,978 24,449 15 500 59,203 24,667 59,703 25,167 16 500 60,979 25,407 61,479 25,907 17 500 62,808 26,170 63,308 26,670 18 500 64,692 26,955 65,192 27,455 19 500 66,633 27,763 67,133 28,263 20 320,714 68,632 28,596 11,409,160 4,753,825 11,798,506 5,103,135 21 500 70,691 29,454 71,191 29,954 22 500 72,812 30,338 73,312 30,838 23 500 74,996 31,248 75,496 31,748 24 500 77,246 32,185 77,746 32,685 25 500 79,564 33,151 80,064 33,651 26 500 81,950 34,145 82,450 34,645 27 500 84,409 35,170 84,909 35,670 28 500 86,941 36,225 87,441 36,725 29 500 89,549 37,312 90,049 37,812 30 574,349 92,236 38,431 18,584,352 7,743,480 19,250,937 8,356,260 31 500 95,003 39,584 95,503 40,084 32 500 97,853 40,771 98,353 41,271 33 500 100,789 41,994 101,289 42,494 34 500 103,812 43,254 104,312 43,754 35 500 106,927 44,552 107,427 45,052 36 500 110,135 45,888 110,635 46,388 37 500 113,439 47,265 113,939 47,765 38 500 116,842 48,683 117,342 49,183 39 500 120,347 50,144 120,847 50,644 40 1,028,572 123,957 51,648 30,271,951 12,613,313 31,424,480 13,693,533 Total 10,000,000 2,120,720 2,951,205 1,229,644 67,269,710 28,029,054 72,341,635 31,379,418

Assumptions:Initial construction costs are not included in the life cycle cost analysis.All Costs in Year of Expenditure DollarsAnnual Construction Increase = 5%Annual Maintenance Increase = 3%Annual Rehabilitation Increase = 5%

Incremental Project costs equals 42% of total project costs.


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8. Conclusions and Recommendations

This section of the report will summarize the types of data necessary to calculate a project’s

long-term costs and to identify gaps in the existing data sets that need to be remedied. The long-

term cost is defined as those costs incurred subsequent to those associated with the projects

initial construction cost including maintenance, rehabilitation, and reconstruction/replacement

costs. Specific features and activities include not only pavement and bridge construction, but

also activities that enhance mobility, safety and visual aesthetics. Historically, these costs have

not been major considerations in deciding whether a project would advance or not. However,

due to limited financial resources, the long-term consequences of adding additional capacity to

the state highway system will put increasing pressures on future year budgets.

At present, there is no central repository of data that would facilitate the development of long-

term project’s cost. Available data is housed in the various CDOT branches and not necessarily

collected in a consistent or readily useable or accessible manner.

Currently, data on surface related activities, bridge, ITS and maintenance is accessed manually

from each branch within CDOT. An individual attempting to compile information on the long-

term costs associated with a project currently has to manually collect the data from each CDOT

Branch.

CDOT has a long history of collecting pavement related history through its Pavement

Management System. This data is used in developing project level Life Cycle Cost Analysis.

The data allows for the development of long-term cost analysis and timing of activities for

maintenance, rehabilitation and reconstruction/replacement activities at the CDOT region,

county and route and reference point specific level.


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Unfortunately, a similar level of analysis for bridge related life cycle cost analysis is currently

not being performed by CDOT. However, bridge staff have indicated that over the next two

years that PONTIS, the CDOT bridge management system, will be employed and when

populated with sufficient data will generate information relating to costs and timing of activities

for maintenance (now covered under the Structures MPS in the maintenance budget),

rehabilitation, and reconstruction/replacement costs by specific location.

Based on the Performance Budgeting System for Maintenance costs are currently tracked under

the nine MPAs under which over fifty specific maintenance activities are subsumed. This

information is collected at the CDOT region, county and reference point specific level.

ITS is currently developing a reporting system that will allow for the development of life cycle

cost analysis based on maintenance and replacement costs for over 30 ITS applications. Specific

maintenance activities include prevention, routine, corrective and replacement activities.

However, the reporting system is currently not sufficiently populated for all ITS applications to

perform Life Cycle Cost Analysis. It is envisioned that the collection of information will be

initiated shortly and that Life Cycle Costs for each ITS application will be generated as the

reporting system comes on line and is populated with sufficient data.

CDOT’s current goal is to develop a reporting system that will be a central repository of all data

relating to project development. The system will track various activities including construction

cost information, maintenance related activities, rehabilitation activities, and

reconstruction/replacement activities for all transportation related features related to a project’s

cost. Once sufficient information is collected for each activity, it will be possible to project

future year costs for each activity down to the CDOT region level, county and reference point

specific level.


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The most noticeable data gaps in developing comprehensive long-term project costs are related

to ITS and bridge. As previously mentioned, the ITS group is currently developing a reporting

system that will allow for the development of life cycle cost analysis based on maintenance and

replacement costs for over 30 ITS applications. This reporting system is consistent with and will

interface with the current CDOT effort to provide a central repository of data related to project

and repair activities. As relates to bridges, PONTIS, the bridge management system should be

reconfigured to interface with the current CDOT effort to provide a central repository of data for

project and repair activities.

Implementing this centralized data set can be accomplished in two phases. The first phase would

identify a comprehensive list of all features necessary to capture all costs associated with a

project including initial cost, maintenance, rehabilitation and reconstruction/replacement over the

projects life. This information would be collected at the CDOT region level, county and

reference point specific level. The second phase would populate the data fields with sufficient

data to allow for the development of cost estimates and the intervals for performing various

activities.

Documents

LIFE CYCLE COSTING · Life Cycle Costing Colorado Department of Transportation 2 2. Background The job of expanding and maintaining 9,200 miles of state highways, 1,950 bridges and